Managers Tell Spotify: Stop Hiding Your Contracts…

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Last week, Radiohead manager Brian Message called for government intervention to unseal secret, ‘NDA’ contracts between companies like Spotify and major labels like Universal Music Group.  Now, that concern is spreading: here’s a statement on the matter just issued by the Featured Artists Coalition (FAC) on why secret streaming contracts suck for artists.

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Streaming is becoming an increasingly important part of the music industry landscape and yet its business model and operations remain little understood within the artist community. Artists hear of big money being paid into the industry but express concern when they see apparently high numbers of streams translate to low numbers in financial terms when royalty statements arrive.

As streaming becomes a significant driver of revenue to major record labels, the commercial deals between them and streaming service providers remain shrouded in Non-Disclosure Agreements that prevent artists from knowing the full commercial backdrop against which they are supposed to get paid.

It is clear that without understanding new digital services in depth, artists cannot begin to negotiate terms effectively or try to renegotiate where labels are using legacy contracts from the physical era to cover streaming as merely a ‘format change’, often with disastrous results for artists.

In discussions on streaming, issues have become conflated such as the decline of digital sales and the rise of streaming and leave little room for positive discussion around how to drive reasonable revenues in the totally new commercial environment.  The economic facts and strategies are rarely laid out let alone explored in detail.

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2 Responses

  1. Anonymous

    maybe when the stop stealing property, ruining reputations, defaming character, bullying, extorting, and then using it all to make money, maybe then someone will give a damn about any of their problems, all parties! Supposed legitimate corporations and their employees engaging in highly illegal activities and not paying the price for it, instead they get to make money for it and i get called the criminal and the villain…

    g g g g g g good riddance!

  2. John Woodruff

    Not only do they (the record labels) treat it as a royalty on an extremely low base, it also attracts a very low royalty in the initial instance. This royalty is set by the owners of the company (say Spotify) that then in turn sets the rate for the whole business. Catch 22, a major record label (of which there are now only a handful) are majority shareholders in Spotify which in turn is “income in kind” generated by the artist’s endeavours. The artist does not share in that income. (they claim it is “un-assignable”)Add to that in a number of contracts there are further packaging and damaged goods reductions! ????????
    On top of that these labels availed themselves of a”catalogue access fee”(which again is – yep you guessed it- “un- assignable”) – from the streaming companies, which is kind of like a fee to them for allowing say Spotify to access their catalogue. Oh by the way the artist does not share in any of that either! Just how many ways can these guys invent to rip off musicians? it’s seemingly endless as they struggle to make their bottom line, and cover their own massive internal overheads.